Facebook hit with competition probes from the EU and UK

4 Jun 2021

Image: © prima91/Stock.adobe.com

Both investigations are looking into Facebook’s classified ads section and how the tech giant utilises the data it collects.

Facebook has been hit by a double whammy with two separate competition investigations in the EU and UK.

The regulators have Facebook Marketplace, the social media giant’s online sales section for users and companies, and Facebook Dating in their sights.

The European Commission’s probe will examine whether Facebook is unlawfully tying the classified ad service to its social network. It will look at how data collected by Facebook is used in operating this marketplace and its social network and if this gives Facebook an unfair advantage over other classified services.

“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups,” EU competition chief Margrethe Vestager said.

“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data.”

On the UK side, the Competition and Markets Authority is investigating Marketplace along similar lines.

“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice,” Andrea Coscelli, CEO of the CMA, said.

The UK investigation extends to Facebook Dating, its online dating service that was rolled out in Europe last year, to examine how data is used as well.

It is one of the first major probes that the CMA has launched since it established its Digital Markets Unit in April, a division tasked with investigating the competitive practices of major tech companies. Since the UK left the EU, the CMA has become a more prevalent authority investigating Big Tech.

While the two probes are being run independently, the CMA and the European Commission said they would liaise with each other.

“Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents,” Facebook said in a statement. “We will continue to cooperate fully with the investigations to demonstrate that they are without merit.”

Jonathan Keane is a freelance business and technology journalist based in Dublin